In Australia we have a unique rivate Health Insurance industry. And unlike other industries you’re not tied into a fixed contract. In fact, it’s really quite flexible. Switching between funds is easy, your age and your health status don’t weigh negatively against you and whether you spend your weekend hang-gliding or playing chess makes no difference to your premium. But so many Australians don’t realise this. In fact it has become quite apparent that there’s some confusion between life insurance and private health insurance. So let’s explore and look at some of the myths that result from this confusion.
Joining a gym or buying a new mobile phone usually ties you into a contract. It’s not surprising that so many consumers are wary of taking up Private Health Insurance or changing health funds because they are concerned about being tied into a fixed term contract that may not meet their needs. What most people don’t realise is that there is actually no such thing as a ‘fixed term contract’ in relation to Private Health Insurance. When you join an Australian Private Health Insurer your commitment is usually to pay on a fortnightly or month-to-month basis. If you decide that the financial commitment is too great or your life situation changes your Private Health Insurance policy can be cancelled without penalty. There are no strings attached. And most funds offer a 30 day cooling off period. So if you change your mind within 30 days of taking out the policy you can cancel and will be reimbursed for any premiums paid if you have not made any claims.
Let’s explore some other myths. You may have always intended to take out private health insurance but you’ve recently had a knee injury, a worrying health diagnosis or an ongoing precondition. So you think you’re not eligible.
Or maybe you think that you’re just too old?
This is simply not the case. Private Health Insurance cannot and does not discriminate on the basis of health or age, all customers on the same product will serve the same waiting periods and receive the same benefits. You can join and take out a policy whether you’re in tip top health, whether you have a pre-existing or ongoing condition or whether you’re in your later years. However, you should be mindful that if you wait to take out Private Health Insurance after your 31st birthday you may incur the Lifetime Health Cover loading. Under Lifetime Health Cover you’ll incur a 2% loading on top of the normal premium amount for each year you waited before taking out hospital cover, up to a maximum of 70%. For example, if you wait until you’re 40 to take out private hospital cover you’ll pay 20% more than someone on the same health cover who joined when they were 31.
Perhaps you’re considering switching between Private Health Insurers but think that if you do so you’ll have to re-serve your waiting periods. Not so. If you’ve already served your waiting periods at your old fund and are transferring to a similar level of cover with your new Private Health Insurer these will be carried across, it’s called continuity of cover. You will only need to serve waiting periods for services that you weren’t covered for under your previous policy. It’s actually easy to switch between funds and often your new health fund will do all the paperwork and organise everything for you.
Maybe you like to spend your free time in activities that others may consider a little risky, like hang-gliding. So you may well think that this excludes you from taking out Private Health Insurance or that your premiums will be sky high. This isn’t the case. There is no discrimination. You’re entitled to the same cover at the same price as everyone else. Another myth exposed.
Lastly, but still of importance is that many people think that once they take out Private Health Insurance all their medical expenses are covered. Not so. But in Australia, we’re fortunate to have Medicare, which covers the cost of doctors and specialists for out of hospital treatment. And Private Health Insurance, depending upon your level on cover, can help cover the rest. Private Health Insurance is really quite simple and easy. So consider it today.